Google Is Again Under an FTC Antitrust Microscope: Reports

By Todd R. Weiss |
Posted 2013-05-24

Google is apparently the subject of a new, fledgling antitrust probe by the U.S. Federal Trade Commission in connection with how the company is selling and marketing its online ads, which are at the heart of Google's annual revenue.

The nascent investigation was reported by Reuters and Bloomberg, based on anonymous sources who provided some details about the latest FTC probe into Google's business conduct.

In its story, Reuters reported that "the source said that it was unlikely that the Federal Trade Commission had sent out civil investigative demands in relation to the probe, which would be the sign of a formal and more serious investigation."

The source told Reuters that Google has not yet been notified of the antitrust investigation so far.

"The new line of inquiry focuses on tools acquired when Google bought display ad company Doubleclick in 2007," reported Reuters. "Other firms which specialize in helping web publishers sell ads to put on their websites are complaining to the FTC, the source said."

Bloomberg said the latest FTC investigation "may not expand into a larger probe," according to its sources. The probe is looking into whether Google "is using its leadership in the online display-advertising market to illegally curb competition, people familiar with the matter said."

For Google, the stakes are high.

"FTC investigators are examining whether Google is using its position in U.S. display ads—a $17.7 billion industry that includes the sale of banner ads on websites—to push companies to use more of its other services, a practice that can be illegal under antitrust laws," reported Bloomberg.

"The FTC is looking at whether Google is using its tools to force companies to bypass competing products and use other Google properties, including a marketplace for buying and selling Internet display ads, and features that help companies maximize revenue," sources told Bloomberg. "The agency is also reviewing Google's potential to use its dominance in search advertising to squeeze out competitors in the display advertising market, the people said."

A Google spokesperson told eWEEK May 24 that the company had no comment about the reports of the new FTC probe.

In January, Google benefited from what was essentially a hand slap from the FTC after a 19-month investigation into prior allegations that the company had been manipulating its search algorithms to favor Google's results over competitors. The FTC ruled that not enough evidence existed to prove such allegations. Instead, the company entered into a voluntary agreement with the FTC to change some of its business practices.

Google could have been hit with a government sledgehammer in connection with charges of anticompetitive behaviors against rivals, but instead the search giant came away with a much less damaging fate, which was heavily criticized by rivals in the tech market, including Microsoft.

In the January agreement with the FTC, Google stipulated that it would end some of its past business practices that could stifle competition in the markets for popular devices such as smartphones, tablets and gaming consoles, as well as the market for online search advertising. Under a binding settlement with the FTC, Google will allow competitors access "on fair, reasonable, and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smartphones, laptop and tablet computers and gaming consoles," according to the FTC.

Google also agreed to stop misappropriating—or scraping—the content of its rivals for use in its own specialized search results, and to drop contractual restrictions that impaired the ability of small businesses to advertise on competing search advertising platforms, according to the FTC.

In April, the search giant finally resolved antitrust allegations in Europe by agreeing to improve how it labels ads in its search results and how it displays links to competitors, according to a previous eWEEK story. European regulators had been investigating antitrust allegations against the company since 2010. Under the deal, Google will provide better labeling of its own promoted content and will improve how it displays links to competitors' online ads.

Under the deal, Google didn't have to change the algorithm that produces its search results.